Have you been thinking about expanding your company? One great way to expand is to merge with or acquire your competition or a complementary company. However, mergers and acquisitions are not only financial transactions, but they are also the strategic combination of every part of both companies, including their financial, computer and human resources assets and processes. Therefore, the meshing of these companies has challenges. Consider these tips for a successful incorporation of your companies.

Set Your Goals

Your first step should be setting your goals. For example, what do you hope to get out of a merger or acquisition? Do you hope to reduce your competition and increase your market share, or do you hope to enter another market and diversify your income? Economies of scale may also play a key role in your goals. Continue to focus on your goals throughout your acquisition process.

Research Candidates

When you research the companies that you hope to purchase, you should consider their industries and processes. Learn about their internal systems, including their computer systems, and their human resources. Evaluate the difficulty you will face merging these assets. Learn about their key people and innovative processes or products and consider how they will fit into and benefit your company. Look for surprises or hidden challenges within the company.

You also need to evaluate the finances of the company you hope to purchase. The debt and equity balance is especially important here because you don’t want to purchase a company and acquire a significant amount of debt or obligations. Also, review the company’s contracts and vendors. Identify how you will financially benefit from acquiring the company.

Evaluate Your Finances

Your next step should be to complete a thorough evaluation of your business’s financial situation. You should have adequate liquidity to complete the transaction. Therefore, your profit and loss statements will take a temporary back seat to a review of your debt and equity balance and the strategies you will need to implement to ensure this balance remains.

Build Your Team

When the transaction is complete, you will have duplicate systems and human resources. You need a team that is familiar with the mergers and acquisitions process to solve any problems within the organization. For example, these individuals should understand the financial and organizational challenges you face. They also need to recognize how to integrate computer systems, financial records and reporting and operational processes.

As you complete your research and build your team, you will develop a detailed mergers and acquisitions plan that will ensure your success because it will link every process and transaction back to your goals.